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Commercial Real Estate Investing

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Barrington Smith
  • New to Real Estate
  • Fort Lauderdale
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Seller financing deal

Barrington Smith
  • New to Real Estate
  • Fort Lauderdale
Posted Mar 23 2024, 10:02

I would like others opinion on this offer that was made to me wondering if it’s worth it or not duplex zoned t5-0 commercial resident price at 800k also was offered seller financing cash flowing roughly 80k a year expenses coming up to 22k upstairs is 4 doors all rented out 0% vacancy and downstairs rented out by a chiropractor I’m open to all advice is it worth it bein that it’s my first deal 

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Michael K Gallagher
  • Real Estate Agent
  • Columbus OH
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Michael K Gallagher
  • Real Estate Agent
  • Columbus OH
Replied Mar 27 2024, 10:05

@Barrington Smith I'd be happy to walk through this deal in more detail via phone of webinar if it would be helpful, but at the surface I have the following thoughts:

- I'm unsure what T5-0 entails, I'm assuming its some kind of mixed use.  I'd do your due diligence to understand if there are parking or use restrictions here that might make backfilling the office space more difficult in the future.

- So I understand correctly that you will "cash flow" or profit $80K a year?  does this include all the expenses, capex, maint costs etc?  Seeing a rent roll, and T-12 or T-24 would be helpful to understand the true Profit of the building.

- Although there is no vacancy now, I'd want to see the leases they currently have, especially the commercial lease. Howe much term is left on it, do they have any renewal options? what do those look like? Is it a NNN lease? are you responsible for HVAC? those kinds of things.

- At the surface it sounds like a great opportunity, but I think there needs to be some more digging into the numbers to understand if its worth it at that price, and what the risk profile is.  

-You'd also want to understand what kind of capex issues you are inheriting....does the roof need done? HVAC issues? 

In short, if you can buy it right, its likely worth getting into and could be very powerful.  But owning managing and leasing commercial space should not be taken lightly and you should get as big a picture as you can.  as I said happy to discuss in more detail off line if that would be helpful.  

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Darnell Lockett
  • Real Estate Consultant
  • Miami
61
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164
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Darnell Lockett
  • Real Estate Consultant
  • Miami
Replied May 21 2024, 05:09

Hi @Barrington Smith. I know this post is a few months old, but did you go through with the purchase? I'd love to know. On the surface this looks like a good deal. Btw...I'm here in Miami if you ever need someone to help you look at your deals. I don't mind. 

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